Fri, 22 Sep 2000

APEC wants quick implementation of Asia Gas Grid

JAKARTA (JP): The Asia Pacific Economic Cooperation's (APEC) Partnership for Equitable Growth (PEG) and the Indonesian Chamber of Commerce and Industry (Kadin) have called on Asian countries, especially China and Indonesia, to realize the plan of developing a gas pipeline network connecting all Asian countries.

PEG chief executive officer Shafiq Sit Abdullah said PEG supported "the call by Kadin to speed up the implementation of the Asia Gas Grid", citing the benefits to be reaped by Asian countries, especially Indonesia and China, from the gas pipeline.

"Proper implementation of the Asia Gas Grid ... will no doubt lift Indonesia out of its current predicament and alleviate the financial burden of millions of Indonesians still hurting from the economic crisis," Shafiq said in a statement.

The gas grid would also benefit China, "which is in need of cleaner forms of energy to stave off a pollution crisis by 2005".

PEG was formed in 1998, with its headquarters in Kuala Lumpur, as a non-profit organization to promote public-private initiatives within APEC.

The Trans Asia Gas Grid, spanning from the Natuna Alpha D block in the East Natuna section of the South China Sea to the main coastal cities of China, was first suggested by PEG in 1998 and was welcomed by APEC leaders at their summit meeting in Kuala Lumpur.

The Natuna Alpha D block, which is operated by American oil and gas company ExxonMobil, is believed to contain about 45 trillion cubic feet of gas.

"Significantly, the rich resource of Natuna Alpha D remains stuck in the ground at a time when Indonesia needs revenue and funding to recover economically. It is calculated that the sale of gas from Natuna through this pipeline alone would bring in approximately US$30 billion to $35 billion over the next 30 years for Indonesia," Shafiq said.

During the IIOGE conference, Kadin chairman Aburizal Bakrie proposed to speed up the development of the gas grid.

"Pipeline gas ... is a simpler delivery system and provides a competitive delivered price with a shorter time to market compared with LNG (liquefied natural gas),

"One should not overlook this advantage and what it means to Indonesia," Aburizal said.

Shafiq said Indonesia and China, together with PEG, should work hand in hand to propose the giant pipeline project as a high priority item in the forthcoming APEC leaders meeting in Brunei in November.

He noted, however, that APEC approval was not necessary for the project as long as Indonesia and China were ready to implement it.

"This Asia Gas Grid does not necessarily need the approval of APEC per se. It could well be primarily a bilateral arrangement between China and Indonesia," he said.

Wang of WPC told The Jakarta Post that China "is interested in the ambitious project".

He noted, however, that Indonesia should compete with other gas producers, including Russia.

But Shafiq said that commercially the Trans Asia Gas Grid would be more competitive than the Trans Siberia Gas Grid due to that fact the former would be shorter than the latter and the former would yield higher returns and greater spinoffs. (bkm/jsk)